(MENAFN) Moody's rating agency lowered the credit rating of Croatia from Baa3 to Ba1, however, the outlook was changed from negative to stable, reported Xinhua News.
The country obtained a junk rating from Standard & Poor's in December, whereas Fitch downgraded its outlook to negative from stable in November.
Moody's attributed the move to a sluggish economic recovery and the shortage of fiscal flexibility in government policies.
According to the rating agency, the government's fiscal measures are weak, with general government debt surpassing those of Baa3-rated nations, while the government's ability to re-balance the economy toward exports is basically inadequate.
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